by Russ Steele
I have written many times about the business-smothering regulations, that are killing California jobs, in the local newspaper and on blogs. Now Wendell Cox writing at The City Journal (http://www.city-journal.org/2011/21_4_california-jobs.html) has the depressing numbers.
California’s jobs engine broke down well before the financial crisis.
Everybody knows that California’s economy has struggled mightily since the 2008 financial crisis and subsequent recession. The state’s current unemployment rate, 12.1 percent, is a full 3 percentage points above the national rate. Liberal pundits and politicians tend to blame this dismal performance entirely on the Great Recession; as Jerry Brown put it while campaigning (successfully) for governor last year, “I’ve seen recessions. They come, they go. California always comes back.”
But a study commissioned by City Journal using the National Establishment Time Series database, which has tracked job creation and migration from 1992 through 2008 (so far) in a way that government statistics can’t, reveals the disturbing truth. California’s economy during the second half of that period—2000 through 2008—was far less vibrant and diverse than it had been during the first. Well before the crisis struck, then, the Golden State was setting itself up for a big fall.
One of the starkest signs of California’s malaise during the first decade of the twenty-first century was its changing job dynamics. Even before the downturn, California had stopped attracting new business investment, whether from within the state or from without.
To understand the scope of our problem, you need to read the whole report and study the excellent graphics. They tell a very important story, we are living in a economic disaster area that we created by allowing Sacramento to regulate our economy into a liberal democratic black hole. Yes, we are at fault, and we are the only ones that fix the problem by voting all the useful idiots out of office. Wendell concludes with my emphasis:
What is behind California’s shocking decline—its snuffed-out start-ups, unproductive big cities, poorer jobs, and tinier, weaker, or fleeing companies—during the 2000–2008 period? Steven Malanga’s “Cali to Business: Get Out!” identifies the major villains: suffocating regulations, inflated business taxes and fees, a lawsuit-friendly legal environment, and a political class uninterested in business concerns, if not downright hostile to them. One could add to this list the state’s extraordinarily high cost of living, with housing prices particularly onerous, having skyrocketed in the major metropolitan areas before the downturn—thanks, the research suggests, to overzealous land-use regulation.
One thing is for sure: California will never regain its previous prosperity if it leaves these problems unaddressed. Its profound economic woes aren’t just the result of the Great Recession.
It is going to be up to the voters of California to address these problems at the ballot box. Are you ready? Let’s start by killing AB-32. Yes, I know we muffed our first opportunity, but there are more options to be explored.
Russ Steele is a freelance writer, who blogs at The Next Grand Minimum and Is it 2012 in Nevada County Yet? He encourages CABPRO readers to comment on his blogs.